non married couple joint debt

[AweShucks]

If anyone knows something or has information on this situation please advise. Your input is greatly appreciated.

State of residence Wisconsin SE district

Scenario - My girlfriend has all of her debt jointly with her ex boyfriend. House , car, ccards. Upon splitting they divided up the assets best they could muster and decided to pay the debt where he took the house and she took the car. They would split the ccards. However she has been unable to make the car payments and is falling behind. Also causing her to stop paying her portion of the ccards to her ex. he is getting furious and has threatened to file suit.
however he is listed as the primary on the car she was just the cosigner. the house is in both names and he has kept the payments current. The credit cards are all in his name she was just an authorized user with the exception of two cards which are jointly held. The total ccard debt is about 10k over 6 cards jointly. She does have about 2k of ccard debt solely in her name on 2 other cards.
We are having a baby and medical expenses are growing and I've been out of work and had to file Bk myself I can't help her financially.

1. Does her ex have grounds for suit?
2. Is she a candidate for BK

I told her to give him the damn car! I can supply transportation. But I don't know how liable she is for the ccards? All the information here in the forum refers to joint debt as married and that they were not! What happens to the house if she files to avoid/block suit?

Your input is greatly appreciated!

[lrprn]

1. Does her ex have grounds for suit?

You said they did the split of debt on a handshake, not a legal signed document. As long as Wisconsin doesn't consider their verbal agreement a legal contract (and I don't know if it does), then her ex can't hold her legally responsible for defaulting on the car payments. Co-signing means either signer is responsible to pay the debt in full if the other defaults. He's stuck with the rest of the car debt if she stops making payments on it.

2. Is she a candidate for BK

Sounds like it.

I told her to give him the damn car!

DO NOT do that without checking with an experienced bk lawyer first. It could be considered a transfer of an asset right before filing to an insider in an attempt to hide it - that's bk fraud, even if that really wasn't the intent. Don't want to go there for sure. Also she might need the car payment and fuel and maintenance costs as expenses to ensure she can file Ch 7.

Since the car is half hers and half her ex, what happens to it after she files depends on if she can protect her half-interest with the WI auto exemption or not.

What happens to the house if she files to avoid/block suit?

I don't think there can be a suit, but if she decides to file for other reasons she indicates she intends to surrender her portion of the house when she files which relieves her of any financial responsibility after her bk is closed. Her ex is living in the house now and will continue to do so and make the payments. As the co-signer he will assume the remaining value of the mortgage loan in full.

I'm not a lawyer, so be sure to run this by several area bk lawyers during your free or low cost initial consultations. There's no obligation and you two will learn a lot about what's possible and what's not in her situation.

[AweShucks]

Thanks for the input...... I gave her the number for my BK attorney for a consultation.